The Virtue of Business Relations SAICA’s Student Leadership Summit 2009 Theme: How a business can use their values to shape the organisation
A global company faces new societal, economic, political, technological and environmental challenges.However, one central aspect of business remains constant, namelyHuman Relations
A global company competing in a market where knowledge and information technology is readily available, could differentiate itself from other multinational companies by nurturing relationships outside the firm such as with host governments and foreign consumers, as well as internally with employees. Diversity management, adaptable leadership and cultural understanding are necessary to build relationships. Three principles have been identified that could be applied during the formulation of a global business strategy in order to promote business relations: Comprehension, Contribution and Communication These principles, combined with the external factors form the CCC-model, which could assist global companies to formulate a successful strategy
The success of a strategy can be determined by the receptiveness of the people whom the strategy influences. Therefore forming good relationships is central to the successful implementation of strategy. To encourage good relationships a value based approach to business should be adopted as it will encourage loyalty of employees, customers and suppliers.
If the concept of incentives schemes for employees can be extended to include the public, a new dimension of business could arise, namely customer incentives. Where share incentive schemes encourage an employee commitment to adding value to the company. The three values that make up the CCC-Model, namely comprehension, contribution and communication, will form the basis of customer incentives.
The CCC-Model Comprehension Contribution People Strategy Fig 1: Diagrammatic expression of the three principles and external factors underlying a successful global strategy where ‘people’ represents economic, societal and political factors. Technology Environment Communication
Comprehension Gaining understanding of the market will enable the global firm to identify competition and needs of foregin consumers. A company will also benefit from better cultural diversity and cultural understanding. Continuous market research and the employment of local people is neccessary to comprehend the dynamics of a foreign country. Comprehension Contribution People Strategy Technology Environment Communication
Contribution Corporate Social Responsibility should be given specific attention in crafting a business strategy. By emphasizing contribution to a country a long term market position could be maintained as receptiveness to a foreign entity could be improved. The contribution that a company is willing give should be communicated from a high level government to individual customers. Active marketing of these actions should be done. Comprehension Contribution People Strategy Technology Environment Communication
Communication Direct communication with both local and foreign customers and governments will benefit aglobal organisation. A direct call-in line could be made available to customers so that they could give suggestions and communicate their needs directly to the company. Competitions for design ideas and new products could be held regularly. In that way local talent in host countries could be recognised and the community involved in the development of the business. Comprehension Contribution People Strategy Technology Environment Communication
If these values become central to the organisation, they will surely contribute to the prosperity of an organisation They foster understanding and compassion. They allow new sources of creativity to surface. They reduce potential conflict situations. They allow new opportunities to be identified. Organisations could benefit greatly management believes that Good relations make good business